Preheat oven to 350 degrees F.
Butter and flour 2 (8 or 9-inch) round cake pans. Combine cake mix, water, oil, 1 tablespoon lemon extract and eggs in a large bowl. Beat for 2 minutes, or until well blended. Stir in ground almonds and 1/2 cup coconut. Divide batter between prepared pans. Bake for 30 minutes, or until toothpick inserted into center of cakes comes out clean. Cool cakes in pans on cooling rack for 15 minutes. Invert cakes onto cooling rack; remove pans. Cool cakes completely. Place 1 cake layer on serving platter. Combine 1/2 cup frosting with 1 tablespoon lemon extract and spread over cake layer on platter. Top with second cake layer. Frost top and sides of cake with remaining frosting. Press sliced almonds around cake sides. Sprinkle top with remaining coconut.
Cook's Note: When toasting shredded coconut, preheat oven to 350 degrees F. Place coconut on baking sheet. Toast for 6 to 8 minutes, or until coconut turns light brown.
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